Electronic advertisement with various mobile and web applications is rapidly growing. With these applications the advertiser pays either for visibility or for clicks but the advertiser cannot actually know if the advertisement generates any purchases.
This is because the advertiser needs to invest in an advertisement upfront without knowing at that point what kind of results the advertisement will generate. Effectiveness of the advertisement is measurable only afterwards, i.e., only after the investment for the advertisement has already been made.
Furthermore, it is very difficult to connect a purchase to a single advertisement that caused the purchase made at the point of sale.
Several companies like Facebook, foursquare, SCVNGR, CheckPoints and shopkick implement time and location specific advertising but with these solutions an advertisement is not connected to a resulting purchase.
Groupon/CityDeal and LivingSocial offer advertising to businesses so that both an advertisement and the resulting purchase reside inside the Groupon or LivingSocial system, i.e., the transaction is taken away from the advertiser's own point of sale, which, to many advertisers is unacceptable due to trade secret and data security.